If you’re worried the job market is about to crack, this week’s numbers say otherwise. New claims for unemployment benefits fell to 206,000 for the week ending September 5, down slightly from a revised 207,000 the week before, the Labor Department reported. That keeps claims near the historically low levels they’ve held for most of the year, even as gas prices and grocery bills have climbed.
The four-week moving average, which smooths out weekly noise and is generally seen as a more reliable signal, also eased to 206,000. Continuing claims, which track people still receiving benefits after their first week of unemployment, dropped by 1,000 to 1,774,000 in the most recent data available, coming in below what economists had expected.
Why does this number matter if my own bills are still going up?
Jobless claims and inflation are measuring two different things, and this week’s report shows them moving in opposite directions. Claims track how many people are newly losing their jobs, and right now that number is still close to the roughly 60-year low of 189,000 hit back in July. Inflation tracks how much things cost, and that’s been climbing separately, driven largely by gasoline and shelter costs. In plain terms, the labor market data says most people who have a job are keeping it, while the inflation data says the money from that job is buying less than it used to.
That combination puts the Federal Reserve in a tighter spot heading into its meeting next week. A labor market this steady gives the Fed less cover to cut rates aggressively to support hiring, because hiring doesn’t look like it needs support. At the same time, persistent price increases argue against a rate cut that could push inflation higher. Markets are currently pricing in a real chance the Fed holds or moves cautiously rather than delivering a larger cut, precisely because this jobs data keeps coming in resilient.
For anyone job hunting right now, low layoff numbers are good news in one sense: employers aren’t shedding workers en masse. But low layoffs don’t necessarily mean lots of new openings either, since companies that aren’t firing people also aren’t always hiring many either. If you’re weighing a job change, the safer read of this data is that the market has stabilized rather than that it’s booming, which matters for how much negotiating leverage you’re likely to have with a new employer right now.
Sources: U.S. News & World Report · U.S. Department of Labor · Federal Reserve Bank of St. Louis (FRED)
